Saturday, February 25, 2012
An Atlas V rocket lifting off yesterday from Cape Canaveral Air Force Station with a monster 15,000 pound military satellite.
As I was expecting, the rate of property sales so far this year lagged the same period in recent years. Since January 1 there have been 15 sales of single family homes in Cocoa beach and Cape Canaveral as reported by the Cocoa Beach MLS. In the same period there have been 50 condo and townhome sales. The two biggest dynamics in play in our market are the depleted inventory (372 condos and 73 homes) and the rapid decline of the number of distressed properties. In the period of January 1 through February 25 last year, distressed sales (short or foreclosed) represented 37% of the single-family home sales and a whopping 47% of the condo sales. In that same period this year the numbers of distressed sales declined to 27% for single-family homes and 26% for condos. This trend of reduced distressed sales will continue as this morning's MLS inventory shows only 17% distressed condo listings out of 372 total and a mere 5% distressed homes. There is a total of only 20 foreclosed properties in our two cities, none of them single family homes. Over half of the foreclosures are at two complexes, nine at Pier Resort and two at Mystic Vistas. There are 42 short sale condo offerings and four single family.
What do these stats mean for participants in our market? With over three quarters of this year's condo sales so far closing with cash, mortgage availability is not a factor. Almost certainly, without high numbers of low-priced distressed listings, we should expect to see stabilization or increases in closed prices. I'm already seeing some indications of this. Obviously it's not the same in all complexes. Until the foreclosures get flushed out at the Pier Resort complex, we won't see any improvement there. With Mystic down to the two last foreclosures I expect that the days of sub-$200,000 sales will shortly be a thing of the past there. For sellers, the light at the end of the tunnel is starting to show. Those with the flexibility to wait it out may at last be rewarded. For buyers, the low-hanging fruit is almost entirely picked and expecting to pay the same or less than the recent comps is likely to be less successful than in the last few years. There are still deals to be had but one needs to be realistic and understand the dynamics.
On another subject, when researching property and agents on the Internet, be skeptical of all you see. False claims on agent websites like "expert this, that or the other" or "specializing in ..." and search engine manipulation are at an all-time high as are domains designed to trick the public into thinking they are actually on our public MLS. We have a broker in our area who maintains a site/s with almost-the-same domain name as our association site even though our association has repeatedly warned members that this is unacceptable (not to mention unethical). The obvious intention is to trick consumers. The puff adder I profiled in the post from earlier this week claims to be a beautiful peacock on the Internet. If you won't believe that a stranger is holding $15,000,000 from your deceased relative that he needs to transfer to your bank account you shouldn't believe that an agent you never met is an expert at anything but claiming to be an expert. This includes me. I could be a clever monkey with a broadband connection harvesting leads to sell to other less-resourceful agents. Trust your gut and ask questions of your agent.
I am frequently asked why lists of property listings from sites like Zillow, Realtor.com, Trulia, etc. almost always contain listings that are no longer active and often already sold. I suspect these sites intentionally leave sold listings up to increase page views. That is their business model after all. If you want real-time accurate MLS data for Cocoa Beach and Cape Canaveral use the public MLS site maintained by our association at http://www.brevardmls.com/ No need to wade through lists that are arranged according to how much a listing agent paid or full of already sold properties.
"He who would search for pearls must dive below." __John Dryden
Thursday, February 23, 2012
After thinking about his promise Dick changed his mind. The delayed gratification of some future deal wasn't working. He decided to use the threat of a bidding war to pressure Woody into letting him write his offer rather than me. Woody relayed all this to me and asked me to step aside and let Dick write the offer for him. I complied. Based on Dick's promise Woody thought he stood a chance (without a competing offer) of getting the unit for less money. After presenting Woody's offer, Dick told Woody that he had submitted the other offer anyway and a bidding war ensued with the price running to almost full asking. Long story short, Woody wound up paying more than he wanted to and Dick was rewarded for his deceit with two commission checks instead of one as he got to sell his other freshly-defeated but anxious-to-purchase client a different unit. I doubt the other buyer ever knew what was going on. I'm happy to have been on the sidelines for this one, unpaid, unsurprised but with integrity intact.
Some of the details of this story may be inaccurate considering that one of the main participants is likely to have told more lies than the ones that surfaced. For instance; Dick may have not submitted the other offer but told Woody that he had in order to get him to up his offer. Or, there may never have even been another offer and Dick used that threat to coerce Woody into letting him write the offer. In any case, tread carefully out there. Trust your gut if it's telling you your agent may be less than honorable. There be dragons and snakes about.
"You can't talk of the dangers of snake poisoning and not mention snakes." ________C. Everett Koop
Saturday, February 11, 2012
I am entering the second weekend of negotiations on a condo in Cape Canaveral. If last weekend is any indication of how this one will go, the listing agent will suspend all communication until the work week starts for her again on Monday. This particular agent, during her five day work week, is quite forthcoming with her immediate rejection of my client's offers and his detailed substantiation of the same on her very over-priced listing. She has been combative and critical of our offers even though they have been solidly supported by recently sold comparable properties in the same building. She has refused all our requests for any substantiation of her asking price and counter offers. The buyer's mind is open to any evidence to support the seller's (and the agent's) opinion of value. [Note: there is none.] Her personal commentary comes immediately upon receipt of an offer or counter-offer before she relays the offer to the seller of the property. Her chip-on-the-shoulder attitude is very likely to prevent the sale of her client's condo even though the buyer is willing to pay more than what the comps suggest is a fair price. I doubt if her client knows that she doesn't work weekends or that she is speaking for him. Bad agent. By the way, she closed one property last year. False confidence.
Sellers, sometimes the reason your property doesn't sell is your agent's fault. The listing agent matters if you hope to sell reasonably fast and receive fair value for your property. If you have an unrealistic opinion of your property's value, feel free to list with anyone. It's not going to sell.
On another subject, sellers, when you accept an offer, it is prudent to get the contract signed and delivered as fast as possible. The buyer's right to cancel period doesn't start until you've signed the contract. We had a closing last week that was still within the buyer's right to cancel period on the day of closing because the sellers took so long to get around to signing the contract that they had verbally accepted. Not smart.
"The art of politics consists in knowing precisely when it is necessary to hit an opponent slightly below the belt." ___Conrad Adenauer
Friday, February 10, 2012
There were also three short sales of condos and one single family home. A large 2/2 at Solana Lake sold for $180,000. This same unit sold for $383,000 in 2005. A 2/1 at the Diplomat closed for $80,000. It last sold in 2005 for $219,000. A 3rd floor, south facing 2/2 at Canaveral Sands closed for $165,000. It last sold for $373,000 in 2005.
Eight of the 29 sales were for less than $100,000 with only five closing for more than $300,000. The highest price paid in the month was a 1st floor (actually 2nd floor over the garage) Meridian direct ocean NE corner 3/3 that sold for $599,000. It last sold for a recorded price of $640,000 two years ago but the actual price paid may have been less as many sales at Meridian recorded for more than the actual cost to the buyers.
A gorgeous 4th floor, south facing Artesia 3 bedroom 3.5 bath with 2636 square feet closed for $450,000. It last sold in 2004 for $530,000.
Two direct ocean units closed in the Constellation in January. One of the larger floor plan (2419 square feet) 3/2 units on the forth floor sold for $425,000. It was remodeled last year. The sellers were asking $550,000 just a year ago BEFORE they remodeled. An 8th floor smaller 3/2 (2126 square feet) in need of a total remodel sold for $335,000. Big ocean and river views from balconies on both sides of both units, one of the unique qualities of south Cocoa Beach where the river is right across the street.
Another 4 year old Magnolia Bay 3/3 closed for $340,000. This one was in the E building and on the 2nd (actually 3rd floor as garage is floor one). Two garage spaces, 10' ceilings and 2108 square feet.
A 6 year old, 3rd floor, direct river 3/2 corner at Solana on the River sold for $295,000. It sold in 2005 for $439,900.
A 5 year old direct river 2nd floor corner 3 bedroom 3.5 bath Garden Bay unit sold for $285,000. Has a 2 car garage and 2600 square feet. A smoking deal. Recorded as sold for $500,000 in 2008 but, like the Meridian numbers, that data is suspect.
One of the bigger floor plan Puerto del Rio (2336 square feet) 3/2 corners closed for $175,913. Not bad for a 5 year old 3rd floor corner unit with a huge 180 degree wrap balcony.
A direct ocean Cocoa Beach Club 2 story NE corner 2 bedroom, 2.5 bath unit closed for $240,000. 1176 square feet, no garage.rentals allowed.
I expect the slow pace of sales to continue with total MLS inventory of only 385 condos and 76 single family homes in the two cities this morning. Buyer interest is high but with the low supply finding the right property or the right price is not as easy as in the recent past.
Farming looks mighty easy when your plow is a pencil and you're a thousand miles from the corn field. ___Dwight D. Eisenhower
Thursday, February 02, 2012
Rocky shoreline in Satellite Beach at low tide. There are no rocks in Cocoa Beach but as one heads south, rocks are first encountered at Patrick Air Force Base and the rocky shore continues all the way to Indialantic.
(This subject never goes away. This original post was from 2009 but, to this day, loan officers and brokers continue to over-promise and fail.)
Does this make my butt look big? Everyone knows there is only one correct answer to this question no matter who is doing the asking. There is another popular question that also has but one answer. That question is one that is posed to loan officers and mortgage brokers every day, "Do you foresee any issues with my getting a loan on this property?" Day one in loan officer school the class is asked this question and then instructed to shout in unison, "No, not at all." over and over until the phrase is firmly imprinted on their brains. Then, when "the question" is posed by an actual borrower, the neuro lingual programming takes over without any conscious thought and "the answer" comes forth confidently. Doesn't matter that the Florida condo that the borrower is asking about is 1800 miles away from the lender's office or that the last Florida condo loan that the loan officer did was in 2006. "We can do it" he says with a confident smile. Right. He can do it until he can't and that usually doesn't becomes evident until well down the road towards closing.
All borrowers who are buying a Florida condo would be well advised to talk to a lender in the market in which they are purchasing. There are issues with Florida condo loans that lenders will not encounter anywhere else. A great credit score and previous relationship with a distant lender might not be enough when the hurdles to closing start appearing. A good local lender who is active in our market will have knowledge about Florida-specific loan issues and will likely have encountered many of the sure-to-happen problems with previous loans. That knowledge allows him to be proactive rather than reactive in addressing these issues. Anticipating and working to solve an issue before it presents itself can be the difference in making a closing date or not.
Disclaimer: I'm not saying out-of-area lenders can't close deals here. It happens all the time, but, from plenty of personal experience, I can say without hesitation that the odds of having problems are increased when the lender is not local. Just don't expect a loan officer to admit that his performance out of state may be compromised by lack of local experience. Remember the NLP "answer" from class. I can close deals and represent buyers anywhere in the state of Florida but I don't venture outside my market because I can't do the best possible job for my client in a market I don't know. Greed and false confidence encourages many realtors and lenders to venture out onto the thin ice, often to their client's detriment. Be skeptical when yours fearlessly claims proficiency in an unknown market.
/cue theme song (everyone sing along)__ "Knowledge is power..."
"Education is when you read the fine print. Experience is what you get if you don't."_____Pete Seeger